Maitland/AMO Morning Monitor – Wednesday 24 June 2020

24th June 2020

In the news

  • Intu, the owner of shopping centres such as Lakeside and the Trafford Centre, is on the brink of falling into administration. The group, which is saddled with £4.5 billion of debts, employs about 2,500 at 17 centres.
  • Up to 25,000 jobs are under threat in the UK motor industry, one in six of the total, according to the industry body. Jaguar Land Rover has already announced 6,000 job losses and the Society of Motor Manufacturers & Traders is warning more will follow without government support. It is pressing ministers for a scrappage scheme to encourage people to buy a new car.
  • Tata Steel is set to agree a rescue deal with the UK government “within days”, which would help preserve around 8,000 jobs. The deal is due to be the first major transaction under “Project Birch”, set up to help strategically important companies through the crisis with bespoke funding arrangements.
  • The Trump administration has increased its efforts to reshape federal environmental protection policy during the coronavirus pandemic with lighter regulation of America’s air and water. In response to the economic slowdown, the President has told officials to find ways of speeding up construction of highway and pipeline projects that could circumvent environmental reviews.

Politics today

  • 08:45: Government's Proposal For The UK's New Immigration System - Migration Advisory Committee Interim Chair Brian Bell at Home Affairs Committee session
  • 10:30: Implications of COVID-19 for transport - Grant Shapps at Transport Committee session
  • 11:00: Withdrawal Agreement Joint Committee meeting - European Scrutiny Committee publishes report
  • 12:00: Prime Minister's Questions

Stock market moves

  • The FTSE 100 opened down 0.5% and Europe’s STOXX 600 is down 0.4%.
  • In Asia, Hong Kong’s Hang Seng index was up 0.1 per cent on Wednesday afternoon while China’s CSI 300 benchmark rose 0.2 per cent. South Korea’s Kospi climbed 1.7 per cent after North Korea said it had suspended plans for military action against the country, marking a de-escalation in recent provocations.
  • Overnight, the S&P 500 closed 0.4 per cent higher as investors were emboldened after manufacturing gauges for France, Germany and the UK rose more than economists had expected.
  • Futures tipped the US stock benchmark to rise 0.3 per cent when trading begins on Wall Street later in the day.

Corporate announcements

* Maitland Client

Persimmon PLC Appointment of new Chief Executive Officer
  • Persimmon plc has appointed Dean Finch as the Group’s new CEO. Dean will be succeeding David Jenkinson, who announced in early 2020 that he wished to step down from the role.
  • Dean is expected to join the Persimmon Board and take up the CEO role at the end of this year.
National Express Group PLC* Dean Finch to step down as National Express CEO
  • The Group announces that Dean Finch has resigned as the Group’s CEO to take up a new role as CEO at Persimmon plc.
  • Dean will be leaving the Group towards the end of the year or when a successor is appointed. A further announcement will be made once a leaving date has been agreed.
HarbourVest Global Priv. Equity Ltd Results for the year ended 31 January 2020
  • NAV per share increase of 14.5% to $27.58 over the 12 months.
  • $289.3m net gain on investments (2018: $218.4m).
  • $324.2m cash invested (2019: $396.2m).
  • $200m drawn down from the $600m credit facility in May 2020.
  • The impact of COVID-19 has had, and may continue to have, a material impact on the value and performance of the portfolio.
Petrofac Limited Trading Update
  • On track to deliver US$125m of cost savings in 2020 and up to US$200m in 2021.
  • Trading and awards materially impacted by COVID-19 and the sharp fall in oil and gas prices.
  • New order intake of US$1.0bn in the year to date.
  • Net debt of c.US$139m at 31 May 2020.
Wetherspoon (JD) PLC Further update on COVID-19
  • Following a share placing in April 2020, from which the Company raised a total of approximately £141m before fees, a group of the Company’s lending banks has approved a further £48.3m loan.
  • The Company’s pubs in England are due to reopen on 4 July 2020, in line with the government’s guidance.
  • Following consultation with employees, resulting in over 3,000 suggestions, the company has created the ‘Wetherspoon COVID-19 Secure Operating Plan’, which sets out how the Businesses intends to safely operate pubs when we reopen.
  • The Company does not currently intend to start any new pub development projects in the next 12 months. A small number of projects that were “on site” when pubs closed will be completed in due course.
St. Modwen Properties PLC Trading update for the period ended 31 May 2020
  • See-through net borrowings increased by only £14m to the end of May to £360m, including our £35m share of the cash held on deposit in our NCGM JV.
  • On a see-through basis, the Group had £157m of cash available at the end of May, excluding the cash held on deposit in its NCGM JV.
  • No debt maturities until December 2023, aside from a small JV facility, of which £2m is drawn.
  • The disruption from the COVID-19 crisis will lead to a reduction in housebuilding profits and retail rent in the first half of 2020, which is expected to reduce adjusted EPRA earnings to c. £4-5m (H1 2019: £16.2m).
  • 20% voluntary reduction in Board pay and fees previously announced, a reduction in all discretionary spend and bonuses, a temporary tapered reduction in pay for higher earners, and selective redundancies.
Crest Nicholson Holdings PLC Half-year Report
  • Revenue fell 52% to £240.0m (HY19 £501.9m).
  • Loss before tax £51.2m (HY19: £64.4m profit).
  • Adjusted basic EPS fell 93% to 1.40p (HY19: 20.20p).
  • Net debt £93.3m (HY19: £68.3m).
  • Peter Truscott, CEO, said: “We cannot ignore the risks that COVID-19 presents to the UK housing market even if we cannot predict with certainty what the impact of those risks will be. Therefore, we have adapted our strategy by deferring the planned opening of an additional division and targeting further reductions in overheads. Taking decisive action now will ensure Crest Nicholson is able to flourish in whatever market conditions may emerge in the future including if the market quickly returns to growth.”